Free Press Staff Writer

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MONTPELIER — Since July, the Department of Information and Innovation has begun monitoring 25 technology projects across state government and more closely managing another dozen.

That’s only half the projects under way with price tags greater than $100,000, but it’s five times more than the department oversaw in 2011 — before a worried Legislature gave the information department expanded responsibility and authority.

Twenty-two of the 37 projects now either overseen or managed by the department are on schedule, on budget and delivering what the state expected, Information Commissioner Richard Boes said.

His staff has raised yellow caution flags on 14 to indicate something isn’t going as planned, although that doesn’t necessarily mean they are in trouble, Boes said.

“We have one that is at imminent risk of failure,” he said.

Boes would disclose only that the troubled project is in the Agency of Human Services, saying he didn’t want to identify it now because of ongoing negotiations with the vendor.

He did say the project was authorized and begun under the Douglas administration and that it didn’t undergo an independent review. The problem is, Boes said, “the vendor has not been able to deliver.”

This yet-to-be-unveiled, unsuccessful project will be added to a short list of failed technology upgrades in state agencies that have grabbed public attention in the past year.

The poster child on the list is the system modernization launched at the Department of Motor Vehicles nearly seven years ago and abandoned last winter after more than $18 million had been spent with little to show.

The DMV picture brightened last Wednesday when the Shumlin administration announced it had won an $8.3 million refund in a settlement with Hewlett-Packard.

The agreement means the state recoups nearly all the payments made to the four companies that held the contract for developing the DMV system through a string of corporate ownership changes. The state is still out $4.7 million for the time DMV staff spent on the aborted project, plus money spent on interfaces it won’t now use, payments to a consultant who helped the state assess the flawed system and other associated expenses. Some of the $18 million bought software and hardware the department was able to use.

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The list of disappointments also includes the failed attempt by a vendor to produce a statewide case management system for the courts and the lukewarm results of a tax department upgrade.

The trend worried Gov. Peter Shumlin.

“It seemed to me we were losing the battle too often,” he said. “There were too many individual systems and too many contracts entered into where there weren’t results.” He hired Boes to bring his “cutting-edge knowledge and experience” to state government.

Boes came to Vermont from California where he had been senior director of information technology services and chief information security officer at Cal State Fresno since 2005. His job included setting the strategic vision for technology services at the school.

“I do think we have moved light-years in the last 12 months in accountability and procurement,” Shumlin said.

The worrisome trend also spurred Sen. Vince Illuzzi, R-Essex/Orleans, last spring to insert provisions in the budget for state government that expand the role of the Department of Information and Innovation in technology projects with price tags over $100,000 beginning in July.

“I strengthened the hand of DII,” Illuzzi said, but added, “The law change isn’t as strong as I would have liked.” He has long been concerned about the lack of centralized expertise on technology and wanted to put one department in charge.

“I wanted to give DII absolute control over every technology purchase,” Illuzzi said. “I wanted all the IT people in state government employed by DII so they could be more effectively deployed and spread across the government.”

During his unsuccessful campaign to become state auditor this fall, Illuzzi continued to shine a spotlight on the recent technology upgrade troubles. He called for a performance audit that would scrutinize current technology projects with an eye toward recommending additional law or practice changes to protect taxpayer investments and ensure fulfillment of promises made about better service and efficiency.

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House Speaker Shap Smith, D-Morrisville, said several lawmakers have suggested to him that there ought to be a legislative committee charged with overseeing technology development. He now sees that as an idea worth exploring.

Given continuing concerns about shrunken tax resources and spending growth, Smith said, “Anytime we are spending money on something that doesn’t work, we are using money that could have been used more effectively somewhere else.”

“My concern is there does seem to be a pattern of systems that failed to meet the needs that had been identified,” Smith said. “Information technology is imperative for us to function effectively as a government. If we are continually failing, then we are failing in one of our main functions of government.”

New oversight

The compromise Illuzzi inserted in the budget gives the information department authority to not only help define need and design technology projects, but also assess risk and approve projects that cost more than $100,000, and provide ongoing oversight throughout the full lifecycle of projects.

Boes said his six project management staff continue to ramp up their oversight to bring all 75 ongoing projects under their gaze.

“As we give these things more scrutiny, it will reduce risk,” Boes said, but added, “You can’t guarantee success on every project. You want to minimize the number of failures and the cost.”

Under his leadership over the past 18 months, the state has been routinely assessing the risks associated with new projects, risks such as contracting for a system that has never before been built.

Boes noted that in the two high-profile project failures, DMV and the courts, “We were doing something that no other state had done.” That was also the case for the tax system upgrade and the impending failure in the Agency of Human Services.

“Just because you are doing something first doesn’t mean you will fail, but it does increase the risk,” Boes said.

Lawmakers and many state managers have a new wariness about taking big risks in hopes of seeing big payoffs, Boes said. “Due to our recent experiences with DMV and the courts, we are unwilling to take the same level of risk that we have in the past.”

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This new aversion to high risk manifested itself in at least two projects of the 14 that the information department flagged since taking on its new oversight role.

One was an offender management system that the Department of Corrections had put out to bid and picked a vendor. Based on further evaluation, “the risk of that was deemed by Corrections to be too high,” Boes said. State officials are rewriting the request for proposals.

“That is yellow because the original timeline said we would be done with procurement by now,” Boes explained.

Similarly, the Department of Public Safety recently pulled back on a grants management system after a risk evaluation.

“I think these are good things,” Boes said of the restarts. “We are going to an appropriate process and understanding the risks.”

Risk assessments cost money and take four to six weeks. The Department of Information and Innovation often hires independent experts. Despite the expense, $5,000 to $15,000 for modest projects and more for multi-million dollar big ones, Boes said, “when you are talking about projects over $500,000, it is worth it to mitigate the risk.”

While the department has devoted a lot of attention to projects already under way, Boes said he sees a need to improve the contracts for future projects to help all parties avoid the pitfalls that lead to failure.

In his November newsletter, Boes wrote, “We need to do a better job of specifying what the state needs and ensuring appropriate accountability is in place prior to a contract being signed.”

Big picture

Meanwhile, Boes also is working on a report the Legislature requested that will give them the big picture of future technology modernization needs across state government.

Despite a few high-profile failures, Boes said the state can’t stand still.

“Everybody is always doing something because you have to,” he said. “Technology is something that continually evolves.”

State government has numerous “legacy systems,” computer technology that no longer fully meets the needs of the state’s customers or employees, or can’t be upgraded. They can’t all be replaced at once.

Boes said “business-critical” services should be the priorities for technology upgrades.

Managers across state government have suggested 138 potential technology improvement projects and information department staff will do a gap analysis to see what else should be done.

After prioritizing the list, Boes will create a timeline, with cost estimates, that he will offer lawmakers as a guide for technology activity for the next decade.

Boes stressed that the state’s technology systems aren’t in crisis.

“We have done a very good job in the state maintaining our older systems,” he said. “Most of these older systems aren’t at risk of failing.”